[This review was published in The American Conservative
on November 18, 2002.The version here is as it was originally
written. The review as published omitted an important
paragraph giving Murphey’s analysis.]

Book Review

Wealth and Democracy

Kevin Phillips

New York: Broadway Books,
2002

This is the tenth book
by Kevin Phillips, who is well known to most readers as the author of The
Emerging Republican Majority (1969) and The Politics of Rich and Poor
(1990).He was a leading member of the
Nixon campaign team in 1968 as its chief analyst of political and voting
patterns.Over the years, he has been an
articulate commentator on social, political and economic issues.

Wealth and Democracy can be seen as a
follow-up book on his 1990 discussion of the rich and poor – but not as a mere
update, because it extends its vision to cover a number of other facets, including
the disparities of wealth in American economic history from the 1790s to the
present.

Its title suggests
that it is an exploration of "democracy" as affected by polarities of
wealth and income, but actually Phillips does little to come to grips with the
specifics of how wealth has impacted on American culture or politics.For example, there is no discussion in depth
of the political trajectory and influence of the Kennedy family, or of the
Adamses, Lodges or Rockefellers, although all of these are named in one
connection or another.

The book, however, has
considerable substance and extensive factual detail about several themes that
are interesting in themselves:

.Leading among these, perhaps, is his phase
theory about major economic powers."The similar trajectories of the previous leading economic powers
present a powerful argument for stages of development that the U.S. is itself
following."The phases can be seen
in the rise and fall of sixteenth century Spain, seventeenth
century Holland, and nineteenth
century Britain.In the United States and the others,
Phillips sees a progression from initial vitality and commercial expansion to
erosion and weakness, accompanied by a "resting on ones laurels" (my
phrase) during a period of economic, ideological and military
triumphalism.He especially describes
this latter phase, in which each society has lived off its accumulated
strengths, has transferred capital and technology to others, has moved strongly
into finance rather than continuing with actual production, has seen the rise
of powerful competing economies, and has experienced an ascendancy of the
rentier and conspicuously rich while at the same time unemployment has risen
and the workforce has become sullen.

The concern, of
course, is that the United States is in its terminal
phase as a leading economic power.Readers are advised, however, to keep in mind the speculative nature of
such historical analogies.The idea that
"financialization" leads to vulnerability and decline may well be true,
but Phillips himself notes that it was actually an exhausting war that brought Spain, Holland and Britain off their
respective pinnacles.This mixes and
confuses the causal message.The
present-day United States, involved in a
"war against terror" and extended throughout the world in a
melioristic interventionism, may well become involved in exhausting warfare,
completing the analogy.But that remains
to be seen.The United States' economic
progression is something that anyone attentive to American well-being will want
to follow closely, however; and Phillips' book gives much to ponder.

. Another theme (and
arguably his principal one) is the polarization of wealth and income, which he
traces in its ebb and (occasional) flow from 1790 to the present. His
comparison is especially of the "top 1%" with a variety of segments
of the remainder of the population.Most
pertinent to us today is that he sees an extraordinary expansion of wealth by
the top few in the 1980s and 1990s, while there has been "a relative
stagnation of the middle class and a decline in the net worths of the bottom 60
percent of Americans."The quality
of life of the average American, he says, has declined dramatically, with wives
working to help maintain family income, longer working hours, decreasing job
benefits, longer commutes, and a shift to temporary and parttime employment.

This is a theme the
American Left has stressed in a number of books during recent decades.The hue-and-cry about the polarization became
muted during the boom psychology of the late 1990s (reenforced, almost
certainly, by an unwillingness of the Left to attack while Clinton was
president).Phillips' contribution to
what the Left has already said is largely to bring the data up to date.

The many on the Right
whose thought centers on the purist forms of libertarian and free-market
ideology will consider the subject of economic polarity a
"non-issue."Wealth is the
hallmark of energy, ability and entrepreneurial insight – and there is no such
thing as "too much" success.Those who do not fare as well are perverse if they see the cause of
their failure in the achievements of the rich.

Others on the Right,
however, will recall how classical liberalism and its predecessors for several
centuries fought against the rigidities of landed aristocracy and of
social-political hierarchy in the progression toward individual liberty, a
market economy, and representative institutions.Great wealth today is not primarily
"landed," but those who see a free society from a holistic or systems
approach, concerning themselves with everything that is needed to make a free
society thrive, will look back to that struggle against aristocracy and find
much to be concerned about.If the disparity
between rich and poor were not becoming vast, and if the dynamics of technology
and globalization were not rapidly putting into question the predominance of a
broad middle class, it would be acceptable to write off the Left's (and
Phillips') observations as "the usual carping criticism of a market
economy typical of the history of socialist thought."All "conservatives" today, however,
must ask themselves whether it is wise to do that, precisely from the point of
view of the values and institutions they themselves hold most dear.

.A third theme of Wealth and Democracy
is that government has at all times played a substantial role in the economy
and in the creation of wealth.This
means that laissez-faire has not been the characteristic feature in
American reality.

.This relates closely to Phillips' rejection
of pure free-market ideology, which he sees as "market idolatry and
economic Darwinism."He would
assign the market an essential but subordinate role: "markets must be
reestablished as adjuncts, not criteria, of democracy and representative
government."

Again, we see that the
American Right will disagree within itself over this.The conservatism of Russell Kirk and Richard
Weaver and their successors, for example, has never been centered on market
theory – and has, in fact, opposed much of the vision of a commercial
civilization.This reviewer, on the
other hand, has been a classical liberal all his life; but this hasn't kept him
from thinking it unfortunate that classical liberalism in the nineteenth
century permitted itself to be primarily an economic doctrine (in the form of
"classical" and "neo-classical economics") rather than a
completely elaborated theory of civilization.He has considered it even more unfortunate that classical liberals in
the twentieth century, pushed off onto an ideological margin, have become
increasingly doctrinaire and ideologically circular, leading to a reductionist
philosophy that leaves much out of account.This reviewer would go much further than Phillips, in fact, in
emphasizing the prospective crisis faced by capitalism as technology and global
markets advance and undercut the hundreds of millions of people who inevitably
will not and cannot have the skills that will be demanded.

If there is something
to this (and many deny that there is), those who wish to conserve the
institutions and values of a free society will have much radical thinking to do
in the years ahead.And they will face
this challenge in a context where the world, and even the American population,
is little inclined to care about their thinking one way or the other.

If we are to be
critical of Wealth and Democracy in any fundamental sense, it should be
for what the book does not explore.Phillips expresses apprehension over polarization and American economic
decline, but it seems to this reviewer that that is just one of at least four
major challenges to American success, and even America's existence (in anything
like the form we have known it).The
other three challenges are: the United States' post-1898 self-assigned mission
to intervene throughout the world for the world's improvement, which (exclusive
of the imperative to fight messianic totalitarian ideologies) is an impossible
and quixotic task; the willingness of America's and Europe's "ruling
class" (to use Sam Francis' term for it) to flood the West with Third
World immigrants, changing forever the flavor and content of our societies; and
the lack of will on the part of the American people to stand up in the
"culture war" that is carried on relentlessly against them by the
Left and the countless trucklers who conform themselves to it.

All books cannot
address all subjects, however; and it is perhaps not to be expected that a
given book do more than present its portion of the truth.Phillips' book does a provocative and
informative job on the part that it addresses.